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Published on Wednesday, May 9, 2018

The future of selling travel online

Hugo Kimber, executive chairman of Malvern Group, parent to brands Super Break and, examines the key factors driving a major shift in how travel is being presented, sold and booked online.

"Nobody in the travel industry would dispute that the economics of doing business in the OTA space and more generally, is increasingly challenging. More specifically I would say that as far back as the autumn of 2015, online acquisition hasn't been delivering and the cost of acquiring new customers is becoming a real test. Brand advertising is being increased substantially as companies seek to shore up falling returns on paid search. The budgets required for companies to effectively drive brand awareness is prohibitive for many and over-saturation of demand for online brand marketing and consequent costs is even driving a shift in demand back toward print media.

Meanwhile, the tightening of data protection rules and changes in legislation relating to linked-package holidays is adding further pressure on how travel companies can both win, retain and maximise customer value in a cost-effective way.

All of this means that there is a growing emphasis on putting money into brand differentiation and the need to be relevant in your own right. In such a highly competitive space this demands a deeper focus on personalisation and the ability for brands to facilitate ancillary income.

Personalisation is, of course, all about giving the customer what they want but today this requires moving beyond just the content you share to the whole experience. Online customers today want thematic content, they want the opportunity to be guided by their peers, and to be able to get peer-to-peer endorsement. In future, the research and booking experience will be more integrated and also more horizontal. By this, I mean that rather than the traditional vertical booking experience, when a customer for example books a flight, is offered a hotel room, then a rental car, then something else and so on, we are increasingly seeing that customers also want the ability to share their travel plans with their peers, get advice from both friends and strangers who have been there before, sharing ideas and identifying obstacles. This horizontal approach allows them to refine their trip, pick aspects they want and don't want, to create a full itinerary perfect for them. This enables booking with flexibility and confidence, prioritising booking activity by preference and availability restrictions, not by supplier requirements to book their primary product before those they consider to be ancillary. Get this right and a travel company will be able to hold on to customers and attract others more easily.

Customers today want more than just a beautiful online experience, they need it mixed with the traditional elements of human contact. We're seeing more customers who start their journey digitally, do some of the planning and research, perhaps even book a few elements themselves, but at some point, they often seek to draw in a travel expert to review or affirm their plan, add the finishing touches or perhaps even make the final booking. Industry data tells us there has been recent growth in the sale of packages and, interestingly, this has been driven by young professionals, not by the traditional package customer. I believe that with so much choice, customers are finding that booking a trip is a complicated and difficult process and they are seeking help from professionals.

In response, we at the Malvern Group continue to develop our products and services both by enhancing our brands and their relevance but also through new services and technology. In August of this year we intend to unveil our newest platform which will deliver not just the value, convenience and security of booking but also key features such as personalisation and inspiration delivered through our expertise and affiliations. In test mode with some of our pioneering partners, we believe this addition to our Group is the perfect proof of concept for future travel."

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